Seagate extends lead in hard drive market

Wolfgang Gruener, 19th July 2006

El Segundo (CA) - Despite a slight sequential decline in overall hard drive shipments in the first quarter of this year, Seagate managed to post solid gains and an increased market share, which now stands at 29%, according to market research firm iSuppli. Count in Maxtor's shipments, which Seagate recently acquired, and the company shipped four out of ten hard drives in the Q1.

Stronger than expected demand and a seemingly infinite hunger for more storage space led to shipments of 101.7 million hard drives in the first quarter of this year. Shipments were down 1.7% from the 103.4 million drives that left factories in the fourth quarter of 2004, but it was a very soft drop compared to traditional seasonal declines from Q4 into Q1 - thanks to the booming mobile-PC and consumer-electronics markets.

Seagate was the big winner of the quarter. The company has been commanding a comfortable lead over its competitors for some time; but even when the shipments decline, Seagate is currently able to swim against the trend and achieve positive growth. The company shipped about 28.8 million harddrives in Q4, according to iSuppli and followed up with 29.5 million units in Q1, which was enough to boost its market share from 27.9% to 29.0%.

The dominance of Seagate becomes even more impressive when its acquisition Maxtor is put into the equation: Maxtor, ranked fourth in iSuppli's list of the world's largest hard drive manufacturers, shipped about 12.1 million drives in Q1, which translates into a combined market share 40.9% for Seagate. Starting in Q2, Maxtor will drop out of the ranking and iSuppli estimates that Seagate will be able to retain about half of Maxtor's market share, with the rest going to be evenly distributed among other hard drive manufacturers.

Other winners of the quarter include Western Digital (WD) in position 2 and sales that increased by 700,000 sequentially and now are estimated at 18.8 million. WD holds a market share of about 18.5%. Samsung, ranked sixth, sold 8.73 million drives, which is almost one million more than in Q4; Fujitsu and Excelsor also were able to post slight gains.

On the other end, Hitachi GST and Toshiba had to give up market shares and had to deal with declining shipments. Hitachi GST, the world's third largest hard drive manufacturer, dropped from 16.2 to 14.2% and sold 14.7 million drives - 2 million less than in Q4. Toshiba dropped from 10.0 to 9.3% with shipments declining from 10.3 million units to 9.5 million.